@AimSharepointIT I have had the same issue with installing the MS Provided unzipper in SharePoint for Office 365. I found the tool and added it to the Menu and it integrated well. I got a similar error when I used it on large files. I discovered that there is a 100MB limit to it.. I tried to look for an after market tool, and there are some, but they are either not supported anymore or haven't updated their code since MS brought out their limited tool.
Some of the other apps I looked at ( on the Sharepoint addon site)
- Adactit File Handler
- Tru Copy and Paste
- Not updated since 2016
- Previously tested and found not to install
- Zip it Light
- Only downloads selected files as ZIP, this is now baseline feature of SharePoint online
- Valuation vZip
- Only creates ZIP files
- Not Tested
- one review with "It doesn't work. Waste of time" - 2019
- Does however install onto our SharePoint
- Fail's to launch from modern sharepoint
I haven't looked again for a little while ( 6 Months), perhaps its got better but looking at your error, I don't think so.
If you find anything let me know